IHG Expects Hotel Rates to Stay Strong Thanks to Digital Investments

For InterContinental Hotels Group (IHG), soaring hotel rates owing to a post-pandemic surge in pent-up demand for travel have been a boon after the pandemic bludgeoned the travel sector. But IHG Hotels & Resorts said its pricing power would last beyond the present moment thanks partly to its investments in digital technology. The company also anticipated future growth as China, the world's second-largest economy, reopens.

"Pricing power is here to stay," said CEO Keith Barr in an interview on Tuesday after the company released its earnings.

In the second half of the year, the Windsor, UK-based hotel operator — which has 18 brands, such as Holiday Inn and Six Senses — saw its rates recover to pre-crisis levels. In the fourth quarter, average daily rates worldwide were 13 percent above pre-pandemic levels. The amount IHG could charge per available room went up each quarter throughout the year.

In the fourth quarter, IHG saw pricing strength even though occupancy remained five percentage points behind 2019 levels worldwide. In the Americas, rates were 11.7 percent ahead of 2019 levels, and occupancy was just 1.5 percentage points below 2019.

"While there are economic uncertainties